Viridian Capital Advisors has been helping cannabis companies raise capital for years and now the company has begun initiating research coverage for various companies. The first three receiving a rating are 4Front Ventures (FFNTF) , Ayr Wellness (AYRWF) (formerly Ayr Strategies), and Indus Holdings (INDXF) .
In its recent industry report, the company said: “Specifically, we plan to focus on to-date underappreciated, high-quality names which are poised for outperforming growth and profitable operations.” The company said that it expects at least eight states to pass recreational cannabis legislation this year. Director of Equity Research Jonathan DeCourcey wrote, “By 2025 we believe 36 states will permit recreational sales (from 11 today). Meanwhile, we believe medical cannabis will be legal in all 50 states by the end of our forecast period. Importantly, we do not anticipate any broad federal legalization is coming. This means well-run operators can carve out defensible and sustainable competitive advantages longer term within individual state markets”
Viridian initiated coverage on 4Front with a Buy rating and $1.55 price target on January 26 and the stock was recently trading at $1.78. 4Front is a national multi-state cannabis operator and retailer that specializes in low-cost quality branded cannabis products. The company manufactures and distributes a portfolio of over 25 cannabis brands including Marmas, Crystal Clear, Funky Monkey, Pebbles, and the Pure Ratios wellness collection, distributed through retail outlets and their chain of strategically positioned Mission branded dispensaries. 4Front said that it achieved positive operating cash flow in August and expects a positive adjusted EBITDA starting in the third-quarter of 2020. Viridian wrote, “Despite challenging market dynamics in Washington (lowest wholesale prices in the country), the company is profitable in the state through low cost, high yield cultivation and production.”
The research report said 4Front is leveraging its proven production